PROVIDENCE — With the specter of 38 Studios hanging over them until the very end, Rhode Island lawmakers debated well into the night Tuesday a proposed $8.2-billion budget for the year that begins on July...

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By
KATHERINE GREGG,
Posted Jun. 26, 2013 @ 12:01 am

PROVIDENCE — With the specter of 38 Studios hanging over them until the very end, Rhode Island lawmakers debated well into the night Tuesday a proposed $8.2-billion budget for the year that begins on July 1.

Applause rang out at the start of the debate when House Finance Committee Chairman Helio Melo announced the budget bill had been reworked to postpone tolls on the new Sakonnet River Bridge until April, at the earliest, pending a study.

But it was a rare moment of cheer during a grueling, hours-long House debate that touched on abortion funding, the future of Newport Grand and the controversial shift of 6,500 low-income parents from the state-subsidized health insurance program known as RIte Care over to Obamacare, where they will pay premiums that advocates say they can ill afford.

But in the end, even the staunchest advocates acknowledged they did not know where else to find the millions of dollars to avert the move.

A handful of lawmakers railed against proposed apprenticeship requirements on construction projects eligible for historic tax credits. “Give jobs to all Rhode Islanders not just the select few that have a big lobbying arm in this building,” implored Rep. Jared Nunes, D-Coventry, who works in a family construction business.

But the apprenticeship-requirements sought by a local arm of the Laborers’ International Union survived, along with most of the other potentially controversial items in the proposed budget.

As the night wore on, however, and it became evident House leaders would lose a battle over a promised $12.9 million bonus pension payment that had been diverted to other spots in the budget, House leaders called a recess — and then proposed a compromise.

Instead of permanent repeal, Melo suggested a one-time suspension. But at 11:47 p.m., upset lawmakers voted 39 to 36 to defeat the diversion of the money, leaving a $12.9-million hole in the leadership spending plan.

Earlier, House Majority Leader Nicholas Mattiello talked about his hope that Newport voters eventually allow Newport Grand to become a full-scale casino.

After city voters defeated Newport Grand’s casino bid in November, the owners of the electronic slot-parlor went to the legislature asking for financial relief.

They didn’t get as much as they requested. But the budget would allow Newport Grand to temporarily keep an estimated $1 million more of the video-slot revenue it generates for the state.

“I know there’s a lot of very important competing needs,” Mattiello, D-Cranston, told colleagues. But “if we don’t assist them right now, and give the voters of Newport another opportunity, hopefully to reconsider their decision, Newport Grand may not survive … and that hurts a revenue source.”

Abortion funding sparked a short, but emotional series of exchanges.

Rep. Patricia Morgan, the former head of the state GOP, introduced an amendment to require the state’s soon-to-emerge health exchange to offer reduced-price plans that do “not provide coverage” for abortions alongside those that do.

One side argued that abortion is wrong because life begins “at the point of conception,” as Rep. Peter Palumbo, D-Cranston, put it.

Melo said the state budget was not the proper vehicle for the debate because the health exchange is being launched with federal dollars, to which Rep. Samuel Azzinaro, D-Westerly, said: “Where does the federal government get their money from? They get it from us, we’re the taxpayers.”

“You want choice?” Azzinaro said. “What choice do you have if you only have a plan that says we’re going to fund abortions.”

Fox short-circuited the debate, by ruling Morgan’s amendment out of order.

The lawmakers lamented the proposed shift of 6,500 parents over to Obamacare where advocates say they face new premiums of up to $97 a month and out-of-pocket expenses of up to $2,000 a year. The goal: to save the state an estimated $6 million over the next year.

Rep. Maria Cimini, D-Providence, said she was conflicted because the Affordable Care Act “is a program that I fully support, but we’re also requiring parents who’ve never had to pay a health-care premium to do so … and these are families who live in some cases on less than $25,000 a year.”

While “I think it’s a poor public health decision that we’re making right here,” Cimini said she did not propose an amendment to try to avert the move because “we’re in tough budget times and it was difficult to find the funding for that.”

Mattiello acknowledged the concerns but said the budget would not throw people “on the streets … We’re giving them a good to a very good alternative … [and] not one of you has said to me, ‘Nick, here’s where the money comes from.’ ”

The same argument permeated a debate over $12.9 million disbursed through the state budget, instead of going into the pension fund as the state employee unions believed they had been promised.

Union officials lobbied hard over the last week for the state to make good on a pledge made after the state’s 2011 dramatic pension overhaul froze cost-of-living increases to Rhode Island’s retired public workers until the fund is in better financial shape.

The law required that any state money that comes in — over and above the state’s official revenue estimate — go into the state pension fund. This year that would have totaled $12.9 million. But Chafee opted to carry the money forward into next year’s budget.House leaders — working to avert a potential $30-million deficit — agreed.

“We’re just going to go back on that promise?” said House Minority Leader Brian Newberry, R-North Smithfield. “Why should anyone ever trust us again?”

Rep. Karen MacBeth, D-Cumberland, sought to redirect $12.9 million to the pension fund, and plug the hole with an equal amount from the legislature’s own $38.6-million budget.

After that failed, one lawmaker after another rose from their seats to talk about immorality of making this promise to Rhode Island public employees, while cutting their pensions, then shirking it.

Mattiello noted the taxpayers put $250 million into the pension system as required this year, and this was a bonus promised on the assumption Rhode Island was headed for “good times.’’ But the leadership lost this fight, leaving a $12.9-million hole in the budget.

The proposed revival of historic tax-credits for the rehabilitation of old mills and commercial buildings sparked a hard-fought debate that ran more than two hours.

The budget would make available up to $34 million in previously allocated, but unused credits with a $5-million cap on the amount the developers of any single project could get to offset state income taxes.

The flashpoint was a provision tying the availability of the tax credits for projects costing $10 million or more to the developer’s use of contractors with “approved” apprenticeship programs.

“This is a great article and we are going to screw it up. I’m speechless. This reeks of special interest,” said Nunes. “We have to create jobs. Not just union jobs.”

Morgan, R-West Warwick, proposed an amendment striking the provision. “This is creating a monopoly. That’s all this is.” But her amendment was ultimately defeated.

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Grand and the controversial shift of 6,500 low-income parents from the state-subsidized health insurance program known as RIte Care over to Obamacare, where they will pay premiums that advocates say they can ill afford.